Everyone Will Pay for Seattle's $15 Minimum Wage

June 9, 2014

Last week I blogged about the unintended consequences of the $15 minimum wage approved by SeaTac voters last fall. 

Employers in SeaTac say they are now inundated with applications for jobs, as skilled workers flock to the city to compete for the jobs that used to go to the lowest skilled.   Workers earning the new mandated wage say they lost a slew of valuable benefits when the high wage went into effect, such as paid vacation, free food and free parking.  And some SeaTac businesses are passing their increased labor costs to consumers with a “living wage surcharge.” 

Business owners in Seattle are signaling they will soon be doing the same.  Some of the city’s employers admit they will favor hiring workers with more skills and experience over those with few skills if they must pay $15 per hour.  Many employers say they will be forced to cut worker benefits when the new wage law goes into effect.  Others state they will increase their prices.

Watchdog.org recently featured two small business owners who make it very clear they cannot simply absorb the dramatically increased cost of labor and will pass those costs to consumers.  The owner of The Confectional bakery in Seattle says that in addition to laying off six employees, her company may have to raise their prices or tack on a surcharge to mitigate the costs of the $15 per hour wages she must now pay every worker.  Seattle Subway franchise owner Matt Hollek plans to add $1 to the cost of each sandwich and will reduce health benefits for his eight workers.

Low skill workers will have a more difficult finding a job in Seattle due to the increased competition for the coveted jobs that must pay $15 per hour.   The workers who have jobs will receive fewer benefits.  Everyone will pay more for the goods and services they purchase in the city. 

Will Seattle's workers really be better off?